Capturing the Next Wave: Engage Younger Tax Filers with Video Advertising
The tax landscape in the U.S. has evolved over recent years – technology and regulatory developments have converged, creating more opportunity than ever for taxpayers to feel empowered in filing independently. We have seen the integration of automation and artificial intelligence (AI) help create digital platforms that provide a convenient and efficient way for individuals to navigate the complex world of tax regulations.
At the conclusion of the 2022 tax season, the IRS reported that nearly half (about 46 percent) of all filers submitted their taxes independently. With unemployment rates remaining historically low and the overall workforce volume remaining high, paired with the prior years' high percentage of independent filers, we can anticipate a large subset of online filers for the upcoming 2023 tax season.
Like most providers within the financial services sector, tax brands tend to enjoy strong client retention rates. This is due to the convenience of a continued partnership, where the software can import previous year's data to expedite the end-to-end filing process, users are familiar with the program's functionality, and they trust the brand's security measures and safeguards around their sensitive data.
With the ease of e-file options and increase in online tax filers, customer acquisition is especially important given the higher retention rates in the space. To extend this thinking further, we know that a good portion of the workforce is nearing retirement age (about 25 percent of the working population is aged 55 and over, according to the Bureau of Labor Statistics), which makes the acquisition and retention of the under-25 crowd exponentially more important in the coming years.
Gen Z tax filers are a critical audience for tax service companies. In order to reach these users and build familiarity, tax brands should work to establish a presence in the spaces where gen Z audiences spend their time online. Some of the biggest household names in tax engaged in the social space this past year with ads on Instagram and TikTok. The ad content was straightforward and easy to digest, while the advertising creative was fun and contemporary.
However, gen Z media consumption isn't limited to social platforms. A 2022 survey by Statista revealed that 92 percent of gen Z'ers use streaming devices weekly, with the daily average time spent watching online video averaging between four to seven hours. With the "lean back" nature of video and CTV/OTT streaming, advertising, the viewer has the opportunity to participate in an engaging environment without the perceived intrusiveness that may come with frequent social advertising touchpoints.
We have seen tax providers consistently invest heavily in linear TV advertising, notably during high-profile events like the Super Bowl, as these large splashes can drive wide viewership from diverse audiences. By capitalizing on the CTV/OTT platform advertising options, tax brands can connect more closely with a higher priority audience and be able to further educate viewers through the use of educational but engaging content.
To drive filings among younger users during the 2023 tax season, it will be important for tax companies to build upon the foundational social advertising to Gen Z of 2022 and further amplify messaging and reach by extending into the CTV/OTT and digital video space. CTV is a great way to reach these users and influence all members within their households so that your brand becomes the preferred household name.
To capture attention with this audience, video ad creative should focus on clear and direct messaging that makes complex topics easier to understand. The ad experience should be designed to draw younger audiences in – eye-catching visuals, animation, color, interactive features, QR codes and educational content that all make the ad experience more engaging. For example, tax companies can deliver their video ads on a custom branded canvas that includes interactive tabs where users can explore. Content like product/service options, brand differentiators or benefits can be incorporated into information galleries within the tab. Similarly, user testimonials or product reviews can be integrated into the video ad unit to build credibility and trust.
Video is a powerful medium for storytelling and educating that younger generations gravitate towards. While many tax brands are familiar and comfortable with linear television spots, CTV, OTT and other digital video channels are more likely to meet gen Z where they are. By recognizing the value of early engagement, tax companies can strategically reach young consumers to nurture and build long-term relationships.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Mackenzie Wiedecker is lead of industry solutions of financial services at VDX.tv.